Evolution AB (publ)

Now I will hand the conference over to the speakers, CEO Martin Karlsson and CFO Joakim Andersson. Please go ahead.

Good morning. Welcome everyone to the presentation of Evolution's report for the first quarter 2025. My name is Martin Karlsson and I'm the CEO of Evolution. With me, I have our new CFO Joakim Andersson. Joakim joined Evolution in February and it's great to have you here Joakim. I will start with some comments on our performance in the quarter and then hand over to Joakim for a closer look at our financials. After that, I will conclude with an outlook and then we'll open up the call for questions. Next slide please. Let's start with the financial and operation highlights of the quarter and first let's focus on the operative side, operations side, as two activities have had certain impact on the financial result. The first one, which I highlighted already in the last earnings call, is that we started to add new technical measures that aim to more effectively ring fence the markets with the local regulation and ensure that our games are only available with locally licensed operators for markets where such license exists. Following the introduction of such ring fencing measures in the UK, we have moved forward with other European markets in the quarter. This is a proactive measure. It's a move from our side in markets with high, sorry, from our side in markets with high generalization that the ring fencing has had limited impact. However, in markets with low generalization, we have seen a drop in revenue. As you know, we believe that regulation is positive over time and we see support the regulators in the ways we can. However, as a supplier, our impact is actually quite small as generalization is highly dependent on the regulatory framework and the parameters used such as tax rates, proactive measures. If it is too expensive or too complicated to play, the players will disappear. That is the reality and for regulators, it's about finding the right balance to keep the generalization on high level and to protect the most vulnerable players. The second activity with an impact of the result is the continued work to stop the criminal cyber activity that we face in Asia. We are making constant progress, but the measures do impact the network in general and the revenue is in line with what we have seen in the last couple of quarters. Despite the ring fencing effects and the cyber challenges, I'm positive about 2025 as a with a very strong product roadmap that we only just have started to execute on, together with a solid underlying demand. Both online and live casino are at early stages on the global level and we will continue to expand to meet demand. In the first quarter, we have opened a new studio in Romania, which partly makes up for the capacity that we've lost in Georgia. Later this year, we will open a new state of the art studios in Brazil and in Philippines, as well as a second studio in Michigan, while also expanding at full speed in Malta, Colombia, Argentina, New Jersey and Philadelphia. To name a few, I believe that this is a testament to our stance that we will always prioritize growth and to take market shares over margin. Even though we had various challenges in the quarter, we do not compromise with our long-term beliefs and priorities. In Georgia, the situation for evolution continues to be stable and we operate without disruptions. Our decision to not increase capacity remains as before, as we want to achieve a better balance with less dependencies on a single studio. And while we are speaking about Georgia, I would like, would also like to highlight that we have engaged a highly reputable accounting firm, one of the large four, to conduct a full independent investigation of our operations. They have a complete access to the Georgia studio and have reviewed several hundreds of documents and material. The conclusions are not a surprise to us. Seller levels are well about comparable roles. Any issues with work environment have been dealt with years ago and in direct connection with when they occurred. Any violence of our code of conduct have been handled as they should and strike participation levels have not even been close to what was reported in the media. I could go on for about this for a long time, but I think we leave it there. For evolution, the strike is a past chapter and we will continue to provide a great workplace for our employees in Georgia and elsewhere. Let's say a few words on the actual financials. Net revenue came in at Euro 520.9 million, corresponding to -on-year growth of 3.9%. EBITDA decreased .1% compared to last year and the EBITDA margin comes in at 65.6%, which is somewhat below our estimated full year guidance of 66 to 68%. As a reminder, we foresaw a softer margin in 2025 compared to 2024 due to both the ring passing in regulated markets and the cyber attack countermeasures in Asia. We do, however, believe that the second half of the year will be stronger than the first half and we keep our full year guidance as before. Our live segment was impacted by the European and Asian developments with a revenue coming in at 448.7 million, corresponding to growth of 4%. We continue to see good momentum in North America and also believe that activity in Latin America will pick up supported by the new regulation in Brazil. R&G revenues totaled Euro 72.3 million, growing -on-year by .1% a development that was softer than in the fourth quarter. I believe we can grow more and our No Limit City brand is a testament to that as they have several successful game launches in the quarter. To conclude this slide, I'm of course not happy with our current growth, but the measures behind are important for our overall work to increase the gap to competition. We face challenges that we meet. Any issues we see, we fix. So that will become even better every day and we have an exceptional position to do so with the best product in the world in a structured global market combined with a scalable model, a strong balance sheet and a team of more than 22,000 employees to realize the potential. Next slide please. Moving on to the operational KPIs, which are the headcount numbers and the game rounds index. Looking at the headcount, we have kept the pace in recruitment in the quarter and for the first time ever we've surpassed 22,000 employees, corresponding to an .4% -on-year growth. In order to meet demand for our services, we need to increase our footprint and expand our teams on a global level. I'm very proud of the workplace we offer and our dedication to offering career opportunities at all our sites. We're currently doing a major recruitment push in Brazil and in Philippines ahead of the opening of our new studios there. The game round index can be seen as a general indicator of activity throughout our network over time. For an individual quarter, it does not always correlate with the revenue development, which is evident this time. The increase of .9% in the quarter is most related to the progress of our game shows that are usually popular. Next slide please. Now we are on the most exciting slide and the foundation of our business, to offer the best and most innovative games in the world. We refer to 2024 and 2025 as our leap years and this year we will in total release more than 110 games across our portfolio. At the ICE exhibition in Barcelona in January, we showcased many of the headline games and the response from operators was truly great. We are now in a launch mode and among the releases in the first quarter are War, our version of Casino War game, with an engaging setting and simple routes and Racetrack, which is a great example of how RNG games can be elevated using Live Host. We also released Bet Stacker Blackjack, which is an exciting take on the classic game. In the beginning of April, we launched one of the most anticipated games of the year, Marble Race. It's as simple as it is exciting. Players bet on which marble ball that will win the race or the top two winning combination. It's a fast paced, super easy to take part in or actually just to watch. Reception has been great. Among the upcoming releases, we have Super Color game, which is just a few weeks away. Three big dice, quick rounds with single double and triple betting options with a multiplier of 1000. This will be a hit. And then during the summer, we have what I believe is the most anticipated game of the mall, ICE Fishing, a speed game show with a money wheel unlike anything else. The Live Host will catch multipliers fish in icy water. It's a truly something different. It's spectacular. On the RNG side, we have launched 17 new games in the quarter and another 19 are set for release in the second one. The titles from No Limit City are doing exceptionally and we are currently released some of the best slots on the market. One of the games that I would like to highlight is Duck Hunters, which have was released in February and that has been off to a tremendous start. You would have to go back a very long time to find something similar in terms of performance. So all in all, there's a lot happening right now and I'm very excited about both the latest and upcoming releases. We continue to push the limits and provide the most thrilling player experiences, further widening the gap to competition and creating value for all our stakeholders. Next slide please. Moving on to the geographic breakdown with the revenue performance across our regions, what stands out in the quarter is the development in Europe, which was more or less flat compared to the first quarter in 2024 and down by six percent from the fourth quarter. You can clearly see the effects from the ring fencing in these numbers. What is important to remember is that the underlying demand remains strong and that we through the ring fences measures have created an even stronger foundation that we can grow from. Asia remained on a stable level compared to last quarter's with a revenue of 201.9 million and growth of 2.2 percent compared to the first quarter of 2024. As for Europe, underlying demand is strong and we see great potential as soon as we have come to terms with the ongoing issues with the cyber criminality. North America continues its strong performance with -on-year growth of 15 percent. Ligands are still at early stages in the region and we find new audiences every day. In February, we expanded our partnership with BAT365 in New Jersey, adding to its live dealer offering already available in Pennsylvania. Latam exhibited 9.7 percent growth -on-year, but declined slightly compared to the fourth quarter. We highlighted already in the last report that Brazil's new regulation had experienced some teething problems which have had an effect on the performance. It's not unusual that it takes some time for us to settle in with the new regulation, but we see activity picking up. Other regions, mainly causes of Africa, and continue to show good -on-year growth. A development worth noticing is the jump in revenues from regulated markets, now with a 45 percent share of total net revenues, which is mostly connected to the Brazil regulation. With that, I will hand over to Joachim for a closer look at our financials. Next slide, please.

Thank you, Martin, and good morning to all of you on this call. I'm very happy to be on board and hope to see you all in person at some point in time. I will now present the financial performance in some greater detail, starting on this page, page six, with our financial development over time. As you can see on this page, we are on a long-term growth trajectory, but as shown in the report this morning, and as presented by Martin earlier, we currently have some headwind. Net revenue in the first quarter was 520.9 million, corresponding to a growth of 3.9 percent, compared to the first quarter last year. On a constant currency basis, we estimate the growth to 6.1 percent, as we saw continued negative effects from changes in the currency rates. Our reported EBITDA was 342 million in the quarter, meaning that our margin was 65.6 percent, which is at the bottom end of our full year forecast of 66 to 68 percent. Let's go to the next slide. Here we will take a closer look at the profit and loss statement. Let's start with a breakup of our issues, showing a relatively low growth both in live and RNG, with a growth of 4 percent in live and 3.1 percent in RNG year on year. You all know that we expect more from both categories, and we are working hard, as Martin mentioned, on solving these issues. Our total operating expenses in the first quarter amounted to 217.5 million, which is 15 percent higher than the same period last year. This is a result of our increased investments into new products and new capacity, which in turn will give us continued growth in the future. Our personal expenses amounted to 119.9 million, which is an increase of 12 percent, driven by the net addition of 1,686 employees year on year. The other operating expenses amounted to 59 million, which corresponds to a 21 percent increase. Within this number, we for instance see a higher level of legal cost, as we as a large global business more frequently are engaging in complicated projects where external legal advice is necessary. This costline will over time, as for the other costlines, scale and grow slower than our revenue. It's also worthwhile reminding that compared to last year, we are now running our studios with a less favorable, more costly resource mix, as a consequence of the measures we took last year in connection with the striking yogia. This partial move of operations out of yogia is having a negative impact when comparing the cost base and profitability year on year. As part of our ordinary cost business, we are obviously monitoring the news flow related to the potential changes to global tariffs. At this point in time and from what we know today, we do not expect any material impact on our costs. The financial items were negative 1.3 million in this quarter, primarily driven by revaluation of bank balances. Next tax was 47.5 million in the quarter, with a tax rate of 15.7 percent, and all in all we had a profit for the period of 254.7 million, and with 205.6 million outstanding, we get to earnings per share in EPS of 1.24 euro, which is almost in line with the 1.25 we had for the same period a year ago. Let's move on to the next slide. And now I'm on page eight, where we have an overview of our operating cash flow and capital expenditures. Let's start by looking at the graph to the right, which shows the development of our total capex. Total capex in the period amounted to 33.6 million and was split almost evenly between intangible and tangible assets. The investments into intangible assets was 16.6 million and were mainly spent on development of new games and technical improvements to the platform. The tangible investments were 17 million, mainly spent on studio space, gaming tables, servers, and other technical equipment. In the graph you can also see how our investment pays relate to the last four quarters revenue for each of the periods. As communicated last quarter, we expect the full year capex to amount to around 140 million euro. If we then take a look at the graph to the left, we can see the development of our cash flow and our cash conversion. The operating cash flow after investments amounted to 327.7 million in the quarter, with a very strong cash conversion of 87%. It's a good improvement both year on year as well as quarter on quarter, with a good contribution this quarter from a reduction of the accounts receivables. Finally for me, some brief comments on our financial position on the next page. On this page you will as usual find a summary of the balance sheet for the first quarter compared to what it looked like at the end of last quarter. As you can see our strong financial position remains. We have our bond portfolio 101.6 million and the cash balance of 969.2 million. Our total equity amounts to almost 4.2 billion. There are no material changes during the quarter. We have our annual general meeting on the 9th of May and if the shareholders vote in favor of the board's recommendation, we will, which is in line with our capital allocation framework, pay a cash dividend of 2.8 euros per share, which means that the total amount of 572 million will be paid to shareholders. During the first quarter we used our mandate to repurchase approximately 2.1 million owned shares in the market for a total amount of 154.1 million. As communicated last quarter, the board has decided to repurchase shares for 500 million during the year and we will start the next program of the repurchases within short. With that I will hand it back to Martin for his closing remarks.

Thank you Joakim. So let's summarize the presentation and then move to the Q&A session. Financially we've been off to a slow start this year due to the ongoing continued issues in Asia and the self-imposed proactive strict ring-transit of regulated markets in Europe. As a consequence and in combination with ongoing investments into expansion, our profitability in Q1 comes out on the low end of our estimated full year range and this is of course not good even though we always have quarterly variations. The revenue growth has simply been slower than what we have capacity for. However, am I unhappy with the overall development in the quarter? Definitely not, because everything that we have done support the mission to increase the gap to competition. 2025 will be yet another great year for evolution. That is the bottom line. We are more paranoid than ever and working with an incredibly strong product roadmap and continued studio expansion. We see strong underlying demand. Both the studios in the Philippines and Brazil will be state of the art using all expertise and experience that we have built during our soon 20 years history. On the game side, as said before, we will deliver experiences that players have never seen before. As Joakim mentioned, next week we will hold our annual general meeting that among other things will resolve on the board's dividend proposal. We remain committed to deliver strong shareholder returns under our capital allocation framework. As a last remark, as you know, we always aim to make evolution a bit better every day and we have no time to waste. We are already entering May, which practically means that Christmas is around the corner. It's full speed ahead for all our teams and I look forward to what the rest of the year will bring. With that as an end remark, we move to questions. Next slide, please. The first one out is

Ask a question, please dial pound key five on your telephone keypad. To enter the queue, if you wish to withdraw your question, please dial pound key six on your telephone keypad. Question comes from Oscar Ronkvist from ABG Sundal Collier. Please go ahead.

Thank you. Good morning, good morning Martin, good morning Joakim. Thanks for taking my question. So my first question would just be on the ring fencing in Europe. So you said it started in February and it obviously had quite a big impact on the numbers in Europe. So could you say anything on sort of when that started in February? Was it like one month contribution or was it two months contribution in Q1?

It's a good estimate to count on two months contribution in the first quarter.

Perfect, thank you. And then I know it's, you know, very difficult even for you but I mean, you always say had two percentage points FX headwinds and, you know, the it appears like, you know, two to three percentage points headwind from European ring fencing in Q1. Is it any, you know, in any way possible to sort of quantify the cyber attacks impact so we can get a little bit better sense of the underlying growth in the quarter?

It's very hard to quantify the Asian growth. I mean, we have now three quarters in a row where we are essentially flat. If you go back three quarters before that or even a little bit longer, you will see that we quarter on quarter had a much better growth. Of course, we might not see that we even if we turn this around in a couple quarters that come back to the same level. But of course, we should have a quarter on quarter growth.

All right, perfect. So, and then just again on the cyber attacks. So, you have gotten that from, I think you started mentioning that in Q3 last year. So, this is now the third quarter that you mentioned it. So, can you talk a little bit about how the development has been going? I mean, have you seen more pressures than you initially did after you started that with just thinking on the revenue side if you limit the access to some aggregators possibly and so on? So, is the headwind becoming bigger initially when you stop the distribution to some aggregators and we'll see that picking up in the next few quarters or has it been quite stable over the last couple of quarters?

Yeah, we have good traction on the actions we take. The actions we take in Asia is of course, then partially shutting down and partially growing. And then the sum of that right now is coming out as flat. We are in that process, we're doing the right thing and then the actions that we take will eventually move to a greater increase than what we take away.

Perfect. And I guess there's no additional comments on any timing when we could expect the quarter growth to pick up?

I don't have any more insight on that right now, no.

Got it. Perfect. That was all for me. Thank you.

Thank you very much. Thank you.

The next question comes from Raymond K. from Nordia. Please go ahead.

Hi, good morning. A couple of questions from me as well. Starting on Europe and the sales there impacted by your ring-fencing actions, could you provide some color on whether the growth pace of the countries with high channelization in more recent quarters has been higher or lower than countries with sort of lower channelization? Just understand the underlying growth pace of Europe.

I won't comment on the growth in particular countries. In general, we have seen a blended rate of 9% and I wouldn't say that any of the countries stick out in any extreme way. Gives you some kind of color, I hope.

Yeah, that was helpful. And then I noticed on Latin sales fall sequentially here in Q1. Trying to understand, was this in line with your expectation and could you maybe share what you think is behind this development?

Yeah, I can give it there. I can give a little bit more color. It's as simple as Latin America, except Brazil, is doing very well. We're growing very nicely there. And then we have Brazil, which is the regulation just came into force and that has made that market decline and grow from a lower level. That's, I would say, have taken a little bit slower start than expected, but we have not changed any of our outlook. It looks very promising and there's 230 million people living in Brazil, so the future looks good.

Great. And just another question also on Asia, the technical actions you implemented there. You talked about shutting down and also growing in some parts and it's yielding a flat top line result. But could you maybe elaborate a bit more on any technical actions that you've implemented, or is it just about essentially shutting down in certain parts?

We work both technically as well as commercially, of course, with the customers that we have there and we often relate to technical implementations and we are simply solidifying our protection against theft and detecting of theft. And then when we do that, we shut down parts of it and the other parts continue to grow.

Okay, perfect. Very clear. All for me. I'll get back in line. Thank you.

Thank you very much. Thank you.

The next question comes from Georg Atling from Pareto Securities. Please go ahead.

Good morning, Martin and Joakim. A couple of questions from me, starting also with Europe. I'm trying to understand if the ring sensing that you've done, if that, have you done that all at once or we'll see ring sensing in more markets and let's say Q2?

There won't be more markets. We are, we were sort of done what we're supposed to do or proactively did and it all more or less happened in the beginning of February. So as I said before, two months out of three.

Okay, so a new base from early February, I guess you can read that as. Correct. And second question on Latin, you mentioned Brazil here and I know that the start was quite weak, but could you comment on the trend throughout the quarter as that growth pace in Brazil picked up towards the end of Q1?

We see activity increasing and I want to leave it with that not to make sort of quarter on quarter projections. Okay,

okay. Just final question on Asia. You said you shut down some of your aggregators or distribution partners here. Could you comment on the growth excluding the aggregators that you shut down?

It's a combined measure. There is a lot of things going on and I don't want to go into details. It will only lead us in the wrong direction. We are in combination getting good traction of what we are doing, but essentially we are still flat in revenue and we hope to change that of course. Okay, that's all I have. Thanks. Thank you very much.

Thanks. So for the next speakers, please introduce yourself with the name and company. Thank you. Please go ahead.

Hi, I'm Praveen Gondale from Barclays. Morning Martin. Good morning. Thanks for taking my questions. So firstly on Europe, the growth was notably softer in Europe, but B2C reporting, B2C operators reporting that we have seen so far and then the regulators data in Italy suggest that in the large markets like UK and Italy, the growth was positive and robust. So can you share some more colors on weaker spots in Europe? I know you won't be talking about specific countries here, but what are the areas where you think Evo can improve the performance in coming quarters? And then when can we expect to see Europe returning to positive growth? I mean, when can we expect this ring fencing to be locked up and then?

The proactive measure that we are taking now is to see that we are creating a really good fundamental and a little bit ahead of that. And I've been meeting all the regulators all over the last period and we're working with them. We don't comment on specific countries, just as you know, and as you stated, but I gave you an idea that where the channelization of course was low, the impact of ring fencing is high and with the channelization is high, the impact is low. So essentially the countries that have a very stringent regulation and where they lost a lot of players to unlicensed operators, there will have a larger impact. So that gives you a little bit of the flavor. Then as you understand, we have taken measures in and then of course in the UK a little bit earlier, but for the rest in the beginning of February. So coming out into Q2, we have this now, the new fundamental, the new level and from that, of course, we expect to be able to have a good development.

Thanks, that's helpful. And then quickly on the current trading, can you please share some color on Q2 trading so far and then how should we be thinking about the top line growth trajectory for the remainder of the year?

I'm sorry, but we do not guide on quarters. We stated, I stated that I expect the second half to be a little bit stronger as a result of the full effect of the ring fencing in Q2 and that's what we state when it comes to a little bit favoritism guiding. Thank you very much,

that's really helpful.

Thank you.

Please introduce yourself with name and company, please go ahead.

Hi guys, this is Martin and I'm with D&D in Stockholm. Can you hear me?

I can hear you very well. Thank you. Good morning.

Yeah, great. So I want to ask you on the UK gaming commission review, when do you expect more clarity on that and are you in constant dialogue with them and do you know anything about the outcome? Have you taken all the necessary actions or is there more to be done?

We have taken all actions that we are, that they asked us for, we have provided all the information. It's a process of board-driven like any regulated process by their agenda and their timeline. We have a good cooperation and talks a lot to them and I expect it, we're moving forward. Exactly when it's closing, I can't state that because it's not simply up to me.

Do you know anything on the outcome so far? No, I do not. Okay, I don't want to speculate. And then, yeah, okay. Can you just help us understand a bit more on the ring fencing? I mean, how temporary of an effect is it because a regulated operator that offers your games should just be a click away, right, if the player is out for your games. So why is this a negative effect at all in a medium term perspective?

That's a very good question and let me elaborate slightly on that, not to be too lengthy, but we are a supplier, technical supplier of games. So we are not really affecting the channelization in the country. The channelization in the country is dependent on the parameters that the regulator set up. So if you put a high tax 35, 38 or tax or if you put limitations to what the players can do or deposit rules or other things that actually is an obstruction for the player and against the players will, then the channelization will go down equal to any other regulation of whatever that might be. So if you push the market too hard, the market will find its way to its product in another way. So the regulators, when they push it like that down and the channelization goes down, it's because the players are not comfortable playing on the regulated sites. Then the regulators in some cases now move to repressive measurements. So they want to restrict it even further. They want to invest money in the customs, in the part supporting and that's where we are now. So the players, they need to want to play on the regulated sites. We can't do much about that. So that's why even though it's a click away, it's a bit slow to get back to the licensed site.

Okay, thanks for clarifying that. In your actions from February, how much is this a proactive action from yourself or how much is it that other regulators have picked up the situation in the UK and actually asking you for changes? Okay.

I personally met almost all major regulators in Europe during this period and it's close to 100% proactive measure. So that's what it is. We want to see that we are not, that we stand firm and avoid similar situations and don't forget that we've been regulated for soon 20 years and we have been acting in the same way and been lenient and following through, but the regulators now are moving a little bit and now we're trying to be a little bit ahead of that. So it's a proactive measure.

Perfect. My final question, you repeated the EBITDA guidance and how do you reason behind that? Because I mean, wouldn't it have been more prudent to take a little bit more cautious approach given that you're in the early phase of the changes in Europe? Thank you.

When you make a guidance, you need to make it the best estimate you have for what the year will give or what the EBITDA margin will give and you need to have a good reason for if you're going to lower it or increase it. Right now, this is the best way that we see it. This is our guidance. We think that we will reach between -68% 2025. So we shouldn't change it.

All right. Thank you guys. That's all for me.

Please introduce yourself with the name and company. Please go ahead.

Hi, morning everybody. It's Monique here from SICI. I had three questions if I can. The first one, Martin, just coming back to this idea of the geo blocking that you've been doing in Europe. I'm trying to understand how much of the impact is straight, you know, blocking of unregulated operators in the region and whether there's a subsequent impact which is, you know, on those unregulated sites, for instance, maybe your games were being paid at faster spin speeds with no deposit limit and that has all been removed because now you're just on the regulated sites and therefore the games are being played in line with the regulation. As in, in the regulated markets you were in where you were offering the game to unregulated players, were the games, did they still have the sort of parameters of the regulatory backdrop attached to them or not? That's the first question. The second question is just on the R&G momentum, that slowed materially to 3% this quarter versus 7% last quarter. I just wanted to understand what you think you can be doing to get that portfolio performing better. Is it a matter of releasing more games? Is it, I don't know, or is it something else that you feel you've got to handle on now? And then the final question is just a clarification. I'm just trying to make sure there's no material changes, for instance, in commission rates in any part of your business in this quarter. So all the slowdown that we're seeing is to do with either the one-offs, the cyber attacks, the geo blocking, or it's to do with a slowdown in player volumes. There's no change in commission rates.

Okay, yes. First question is an intelligent question. I understand what you're asking. I wouldn't say that it's because of that the games are slower and that they don't want to play it. So the players when they're ring fans, they don't return because of the, they don't return if they can continue to play on other providers outside the license. So there is a bit of stiffness. I wouldn't assume it has to do with the way that the games are played inside the regulated market. That's the answer to the first question. That's not material as I see it. When it comes to the RNG development, I would say that that is also as much affected by the ring fencing. We don't quantify exactly where the growth is coming from, but it's also affected by that. So that is part of the Q1 is not so much. So that's also part of the effect. And the third effect on the RNG is that we are still working our way to get to a good level in North America. I think that the underlying part of RNG is actually stronger in Q1 than it was in Q4 and in Q3, but the growth comes out 3.1%. So that's what it is. Pricing, no, I don't see any structural changes in the pricing or the player mix or in other, there is no such fundamental.

Thank you. And just sorry, coming back to the first question. So as it was before, pre the geo blocking, where you were offering your games on an unregulated size, they didn't have the regulatory changes attached to them. So, you know, you could play at whatever spin speed, et cetera, but you're just saying that doesn't have a big impact.

I don't say, I don't, I say that an over regulated market or a too stringent market will get low channelization, but I don't see that that is a light switch happening that shows in Q1 that that is the effect that the players are playing, but they're playing on lower speed or other. That's not it. So in terms of the ring fencing, we are stricter. That means that now anyone playing on our products have to have a license where such license exists.

Okay. Thank you.

Thank you.

Please introduce yourself with the name and company. Please go ahead.

Hello. Yeah. Hi, this is the Redra here from Alpha Value. Sorry, I couldn't hear you. I have a couple of questions. Yeah. Hi, can you hear me now?

Yes.

Yeah. Okay. Redra from Alpha Value. And I have three questions. So the first is particularly regarding Asia. So how far along are you with respect to the actions you wanted to take in Asia to fix these cyber fraud issues that you've been having for the past couple of quarters? And any success so far you are noticing as a result of these actions that you would have taken probably a couple of quarters ago?

We are having good traction in with the actions that we are taking. The actions are still leveling out. So we are, as I stated, removing the number of customers and some number of traffic. And at the same time, of course, growing and that equals out. I don't have any exact timeline to relate that to. We are on track with what we are doing. And we hope to see, of course, as we move forward, traction revenue wise as well.

Okay. Perfect. Second one was, do you expect any more of these proactive actions that you've been taking in other markets in Europe? And is that on the horizon or do you see that?

No, I don't expect that. But we are now following the regulation and the regulation is moving in Europe. And now we come to this baseline. And of course, we need to be lenient and follow through also in the future. But right now, I don't expect any other actions.

Okay. And just one on your comments regarding the business growth. You said that there was not more growth in the light casino side was driven by more commission for customers rather than new customers. So does that in any way imply that your wind margins have gone up or are you just seeing more business with the existing customers?

I'm not 100% sure I understood what you meant. But essentially, we are working with the majority of the market already since a number of years. So the growth will come from that the large customers gets larger rather than from small new customers are added.

Okay. Yeah. My question was, is that wind margin going up or is that just more business with existing customers?

I think that we have been in that situation over time. I don't think that that is the driving point of the margin in itself. There are a lot of other aspects that drive the margin, such as the resource mix or other things, more than exactly which customer that have what is your.

Perfect. And just one last one. Sorry for one too many. The question is regarding the margin guidance. What would take you to the higher end versus the lower end in your assumptions or expectations that you kind of want?

Okay. If we get good traction and do what we think that we can do, of course, we will reach the higher end. A little bit more caution on the lower end.

Okay. Good. Thank you. Thank you. Thank you. Thank you.

Please introduce yourself with the name and company. Please go ahead.

Hello. It's Ed Young from Morgan Stanley. Can you hear me?

Oh, yes. Good morning. Good morning.

Good morning. I've got three questions, please. The first is on ring fencing. You've talked about in detail this morning about the ring fencing and the timeline, but you've also talked about this being regulated markets in Europe. Can you just clarify for us if there are any regulated markets in Europe you've not chosen to ring fence? And then more broadly, why wouldn't this be applied to all regulated markets, including outside of Europe? So I just want to understand the framework you've used for the decision you've made around the ring fencing. The second is FX. You've helped me given a sort of XFX number in the statement. I just wondered if you could help us. Is that just on the basis of the translation of where you've earned commission revenue in dollars or whatever it might be? Or is this also applying a player purchasing power effect, which you've sometimes referred to in the past? So if you could perhaps clarify on that and any thoughts on purchasing power. And then the third, Joachim, obviously newly in the role, I just wondered if you could talk through whether there's anything you think needs to be done differently from how it's been done in the past from your seat as CFO in your role? And if you could expand a little bit on what you think you bring as a new face to the Evolution Management team? Thank you.

Yeah, okay. We work with the ones where there is a local license and then we apply ring fencing where those ones exist. So that's the remit and we have implemented it in practically all where that exists. So that's where we are. When it comes to the second question, what was that? Purchasing power and ethics, the ethics effect that we are, that's the bookkeeping currency effect. The purchasing power, we don't quantify that in any way, but of course, the purchasing power effects and it will always be there. We haven't quantified that in any way. So that's the bookkeeping part of it that you see. And the last one was to Joachim regarding his entry of a new role. Welcome Joachim.

Thank you very much. Thank you for the question. I mean, I've been on board for a couple of months, so I'm still new here. I'm learning. I get a lot of impressions, a lot of information to digest. Well, yeah, I mean, to try to still say something about my first impressions, I think it's a fantastic company. I'm super eager to learn more, done great in the past and we have a lot of interesting things on the table. The team is good, quite impressed with background. We have solid processes. It's a high quality of the outputs. So I have a great boss. So yeah, that's probably the first impressions. What can I bring? I mean, this is not a revolution in evolution, but evolution, I think. Jacob, who was my predecessor, great guy and knew a lot. So I'm trying to fill his shoes, start with. Obviously, I have a slightly different background, quite long experience from public companies. As a person, I'm structured and process oriented. I think I mean, think we can improve everything a little bit. So I'm working my way into it, trying to change some things, trying to improve a little bit every day, but nothing revolutionizing.

Thank you. I wonder if I could follow up on the first question. You said practically, so maybe there are one or two you haven't. So could I ask again, what's the framework you've decided whether to do it or not? And can I repeat the global question? I don't

know. But why? Why wouldn't

the approach be applied globally? Okay, thank you.

I won't go into detail country by country, what actions we take, but in general, whether it's a local license, we have ring fans in Europe. All worlds are different. If you look at, for example, United States, we are not obliged to obligation, we have the operators, but that falls on land. So the regulators have a little bit different approach in different jurisdictions. Right now, the European community is moving a little bit towards to be ring fencing or even being the customs of the borders. And we are trying to be a little bit proactive there following. So that's the situation in Europe. And it's different from from other jurisdictions. All jurisdictions are different, of course.

Okay, useful. Thank you. Thank

you. Thank you.

More questions at this time. So I hand the conference back to the speakers for any closing comments.

Thank you very much for listening. Pleasure to talk to you answer your questions, look forward to the next quarter. And some of you will meet soon. So have a nice day. Thank you.